Cash back deals preferred to low-margin discounting
Tuesday February 24 2015
Over half of shoppers have taken part in a cash back or trade-in sales promotion
Cash back sales promotions are consumers’ top alternative to price cuts, with one in four consumers saying a cash back offer was more likely to encourage them to buy a product than any other deal.
According to a OnePoll survey of 2,000 consumers commissioned by Opia, this number was just 12% fewer than the 37% most influenced by discounts. Over half of those polled also confirmed they had taken part in a cash back promotion, the majority of whom were happy with the outcome.
“These results confirm that retailers don’t need to chop their prices at the point of purchase, which ultimately erodes their margins,” said Steve Gales, sales director at Opia.
“Using the right promotional mechanisms, brands and retailers can roll out cash back offers to influence shoppers and give them a good deal for less than half the cost of a straightforward discount.”
The survey also revealed that, when hunting for a deal, 59% of surveyed shoppers would head straight to a retailer’s website, which is more than the 28% who look out for them in-store.
Having taken part in a sales promotion, many consumers are also happy to share post-sale insight and feedback: 64% will give their name and contact information, 44% will opt-in for future news and promotions and 39% will share their likes and dislikes.
Despite not getting a discount at the point of sale, 83% of customers said they would be willing to wait up to a month or longer to claim money back from a cash back offer.
The survey also showed that 77% said it was preferable to receive it electronically direct to their account or via PayPal, which was deemed the fastest and most cost-effective way to manage redemptions. Most consumers polled who were unhappy with cash back deals said it was because the money wasn’t received fast enough.
“Cash back and other types of promotions offer brands and retailers a viable alternative to discounting at a time when most are facing fierce competition,” added Gales. "However, for consumers to fully get behind these offers, the promoters need to ensure that the whole experience is extremely slick and pain-free.”
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